Suppose That PAW, Inc

question 79

Multiple Choice

Suppose that PAW, Inc. has a capital structure of 60 percent equity, 10 percent preferred stock, and 30 percent debt. If the before-tax component costs of equity, preferred stock and debt are 17.5 percent, 12 percent and 6.5 percent, respectively, what is PAW's WACC if the firm faces an average tax rate of 28 percent?

• A)10.71 percent
• B)12.00 percent
• C)13.10 percent
• D)13.65 percent

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Definitions:

Stocking Shelves

The process of organizing and replenishing goods in a retail environment to ensure products are available for customers.

Rotate

The act of turning or spinning on an axis.

Inventory List

A comprehensive list detailing all items or stock held by a business or organization for operational purposes.

Storage

The process or method by which items or data are kept in a safe or appropriate place until they are needed.